But while there is certainly disagreement over the scope of immunity for online service providers — appeals are currently pending in the Second and Ninth Circuits over many of the details of the provisions, for example — the law is generally considered to strike the appropriate balance where it applies.

Now with the introduction of the Stop Online Piracy Act in the US House, critics are concerned that the bill — specifically Section 103, which creates a notice mechanism for preventing sites “dedicated to theft of US property” from profiting off infringement similar to the notice-and-takedown procedure in the DMCA for removing infringing content uploaded by a service provider’s users — will upend this balance.

The EFF warns that the bill threatens to “effectively eliminate the DMCA safe harbors.” Public Knowledge writes that “SOPA would undermine the DMCA.” The Internet abounds with othersraising the alarm over what would become of DMCA safe harbors should SOPA pass.

I had previously written about the need for copyright law to continue to adapt alongside technology. It makes as much sense to freeze the law relating to the online world as it was a decade ago as it does to freeze the technologies that shape the web as they were.

The Stop Online Piracy Act in many ways represents an update to the Digital Millennium Copyright Act — DMCA 2.0 — rather than an end-run around it. The existing safe harbors are good for certain things — user-generated sites and social networking sites to name just two — but not good for others.

Active and Passive Infringement

One major feature of the safe harbors, which illustrates both why they are ineffective against the type of commercial piracy targeted by SOPA and why SOPA enhances rather than eliminates these limitations on liability, is that they are primarily concerned with passive infringement: infringement that occurs through services that is inevitable, but which would be overly burdensome to fully prevent.

The online safe harbors were intended to encourage content owners and service providers to cooperate in order to “detect and deal” with online infringement. They were also meant to give “greater certainty to service providers concerning their legal exposure for infringements that may occur in the course of their activities.” 1Final Conference Report on H.R. 2281, House 105-796, pg. 72 (Oct. 8, 1998). Note the passive “infringements that may occur” — the safe harbors weren’t made for service providers who set out to enable or facilitate infringement.

Perhaps the most popular safe harbor is the one laid out in 17 USC § 512(c), which immunizes service providers from liability for “Information residing on systems and networks at direction of users.” The text of 512(c) supports the idea that the safe harbor was designed for inadvertant and incidental infringement. It shields service providers for copyright infringement liability that arises only “by reason of the storage at the direction of a user of material.” The safe harbor does not apply if the service provider has actual knowledge that material or activity using the material infringes copyright, or if the provider receives a directly attributable financial benefit where it has the right and ability to control infringing activity.

It shouldn’t be controversial to say the DMCA safe harbors were crafted as a shield for service providers, not as a sword against creators and copyright holders. The notice and takedown procedure in Section 103 of the Stop Online Piracy Act thus builds upon the originally intended goals of the DMCA to target only those sites that actively set out to benefit from third-party infringement.

The provisions can only be used against sites that are “primarily designed or operated” to offer services in a way that “engages in, enables, or facilitates” copyright infringement; sites that take “deliberate actions to avoid confirming a high probability” that the site is used to carry out infringement; or sites that promote their use to engage in infringement “as shown by clear expression or other affirmative steps taken to foster infringement.”

Taken as a whole, the bill can only be used against sites that have purposefully taken actions to profit off piracy, actions that are well beyond the scope of the DMCA safe harbors.

DMCA safe harbors remain alive and well

This is not a departure from existing law. The third definition of a “site dedicated to theft of US property” repeats word-for-word the Supreme Court’s articulation of inducement — “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” [Emphasis added.] 2MGM v. Grokster, 545 US 913 (2005). And as one court noted, “inducement liability and the Digital Millennium Copyright Act safe harbors are inherently contradictory. Inducement liability is based on active bad faith conduct aimed at promoting infringement; the statutory safe harbors are based on passive good faith conduct aimed at operating a legitimate internet business.” [Emphasis added.] 3Columbia Pictures v. Fung, CV 06-5579 SVW, Order granting plaintiff’s motion for summary judgment on liability (CD Cali. Dec. 21, 2009).

It’s also important to keep in mind that nothing in the bill negates the safe harbors. A copyright holder can only proceed in court against a site after it has sent a notice to an advertising or financial transaction provider and either those providers failed to comply with the notice or the site operator sends a counter-notification. Even then, the court is limited solely to granting an injunction against the site to cease and desist from doing further any of the actions described above that made it subject to a notification in the first place. 4Which make the claims that SOPA would lead to increased litigation, “shakedowns” of new services, or a boon for trial lawyers absurd: copyright holders already can sue a site for copyright infringement, and if successful, can collect monetary damages. A cause of action that is much narrower than copyright infringement, for which only limited injunctive relief is available, isn’t exactly attractive to someone looking to make a buck.

In practice, the DMCA notice and takedown provisions are ineffective against site operators who take an active role in facilitating, promoting, or turning a blind eye toward the use of their sites for infringing copyright. Many creators would find it a full time job to send notices against these types of sites, and most find that specific content removed quickly returns elsewhere. This results in sites playing a game of “catch me if you can” while continuing to profit off the work of others. And they are especially ineffective against sites that are directed at and easily accessible by US residents but located outside the US and dismissive of US law.

Rogue sites sidestep the rule of law by using the DMCA safe harbors to shield themselves from liability while they take deliberate steps to profit off of piracy. With the Stop Online Piracy Act, the US House is hoping to truly secure the exclusive rights of creators; doing so not only protects creators but also ensures that the development of innovative and sustainable services for consumers to access and enjoy media and content is not hamstrung.

Which make the claims that SOPA would lead to increased litigation, “shakedowns” of new services, or a boon for trial lawyers absurd: copyright holders already can sue a site for copyright infringement, and if successful, can collect monetary damages. A cause of action that is much narrower than copyright infringement, for which only limited injunctive relief is available, isn’t exactly attractive to someone looking to make a buck.

2 Comments

As always,
Terry cuts through the fear-mongering, Big-Tech mis-information campaign to give us the real scoop.
Any word on when this Bill is up for a vote in the Senate? Or if not, when are they going to debate? I’d like to watch on C-Span, if it’s available.

This is not a departure from existing law. The third definition of a “site dedicated to theft of US property” repeats word-for-word the Supreme Court’s articulation of inducement — “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

And the definition of a site “dedicated to the theft of US property” as one that “is taking, or has taken, deliberate actions to avoid confirming a high probability of” infringement comes right out of the Supreme Court opinion in Global-Tech v. SEB.

There, the Court said: “Under this formulation, a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts.” Found at: http://www.supremecourt.gov/opinions/10pdf/10-6.pdf

I don’t see how that follows. As the Court explains in Global-Tech, there are two prongs to the inquiry: “(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.”

So there is no duty to do anything unless the site operator actually believes that there’s a high probability of infringement and takes deliberate actions to avoid finding out for sure. As the Court notes, these “requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence.”

This isn’t anywhere close to imposing a general duty to monitor. All these definitions are doing is saying that a site that induces or is willfully blind to infringement isn’t protected. That’s hardly controversial in my book.

About

Copyhype provides news and info on current developments relating to copyright law, the media industries, and the digital economy. It cuts through the hype to bring reasoned discussion aimed at both legal and nonlegal audiences.

Terry Hart is currently VP Legal Policy and Copyright Counsel at the Copyright Alliance. Any opinions expressed on this site remain his own and not necessarily those of his present or any past employers.